After the release of a few Joker loving patients from Arkham, a man known only as the Merrymaker gathered them up into what was known as the League of Smiles. Under the Merrymaker these individuals were given a sense of identity, though they did not know that they were being used and manipulated by their leader.
After the Joker would have his face cut off by the Dollmaker, Merrymaker would lead a group of protesters into demanding equal rights for the insane. Each day more and more people would join the cause to support the Joker. When the Joker would return, many people would turn to Merryman who would wreak havoc among the city. Although initially it was just burning objects, it would later spread to murder. However, the most volatile and violent crimes committed would not be by the League, but rather framed on them by Ignatius Ogilvy.
After the Batman exposed the Merrymaker to the League as their former cruel doctor, Byron Meredith, the organization crumbled as they turned on their former leader. After incapacitating Merrymaker, the Batman quickly ended the League.